Crisis-hit IndusInd Bank on Tuesday announced the resignation of Sumant Kathpalia from the position of Managing Director (MD) and Chief Executive Officer (CEO), effective from the close of working hours on April 29, 2025.

“We hereby inform that Mr. Sumant Kathpalia (DIN: 01054434), Managing Director & CEO and Key Managerial Personnel of the Bank, has, by his letter dated April 29, 2025, resigned from the services of the Bank with effect from the close of working hours on April 29, 2025,” the private lender stated in a filing to the BSE.

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In his resignation letter, Kathpalia wrote: “I wish to submit my resignation from the services of the Bank in relation to the ongoing derivatives discussion. I undertake moral responsibility, given the various acts of commission and omission that have been brought to my notice. I request that my resignation be taken on record at the close of working hours today.”

Deputy CEO Arun Khurana had also stepped down earlier, following revelations of accounting discrepancies in the bank’s derivatives trading activities.

The bank has been facing significant headwinds in recent weeks, with the primary concern being a 2.35 per cent  overstatement in its derivatives portfolio due to long-standing internal trade accounting discrepancies.

These developments come in the wake of an independent investigation conducted by a professional firm appointed by the bank’s board on March 20. The firm’s report confirmed that incorrect accounting practices led to an adverse cumulative impact of ₹1,959.98 crore on the bank’s profit and loss account as of March 31, 2025.

The discrepancies stemmed mainly from the incorrect accounting of internal derivative trades, particularly those involving early termination. These errors resulted in the recording of notional profits and a distortion of the bank’s financials.